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TMI Blog2022 (1) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... justified and reasonable in directing the AO to redo the assessment after thorough examination of the issue of claim of depreciation on Intangible asset-USA asset after giving an opportunity to the assessee. Appeal of the assessee is dismissed. - ITA No.122/Hyd/2020 - - - Dated:- 6-1-2022 - S/Shri A .Mohan Alankamony, Accountant Member And Chandra Mohan Garg, Judicial Member For the Assessee : Shri P.Murali Mohan Rao , AR For the Revenue : Shri B.Bala Krishna CIT (DR) ORDER PER BENCH This is an appeal filed by the assessee against the order u/s.263 of the Act of the Pr. CIT-4, Hyderabad dated 20.3.2019 for the assessment year 2014-15. 2. The appeal is time barred by 244 days. The assessee has filed condonation petition dated 26.2.2021 supported with affidavit sworn by Shri Venkata Subash Lingareddy, Managing Director of the assessee company. The contents of the petition read as under: I, Venkata Subash Lingareddy, Managing Director of M/s. Ocimum Bio Solutions India imited hereby state that, I am acquaint with the facts of the case in respect of appeal which has been filed with the ITAT in respect of the Assessment Year 2014-15, and I state that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of ₹ 11,60,61,439/- towards depreciation on Intangibles. He further observed that in the assessment made u/s.143(3) for the assessment year 2015-16, the depreciation on intangible asset of ₹ 8,15,12,877/- was disallowed on the ground that the intangible asset-USA asset is not used for the purpose of the business or profession and the assessee could not furnish any corroborative evidence to support its claim that the asset is owned wholly or partly by it. Similarly, for the assessment year 2014-15, the depreciation on intangible asset amounting to ₹ 11,60,61,439/- was to be disallowed. Ld Pr. CIT also observed that the assessee at para No.6(iii) in his submissions made on 3.1.2019 under the head intangible asset is used for the purposes of business or profession has stated that the intangible asset acquired has been used for the purpose of assessee s business and it shall be eligible for depreciation. He, accordingly, issued show cause notice u/s.263 of the Act dated 10.12.2018 to the assessee to explain as to why the assessment order is not erroneous and prejudicial to the interest of the revenue in not disallowing the depreciation claimed for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order dated 26.12.2016 for assessment year 2014-15 and order passed by ld. Pr. CIT u/s.263 of the Act dated 20.3.2019 and submitted that the AO while passing the order for assessment year 2015-16 has disallowed the same since intangible asset-USA asset is not used for the purpose of business or profession of the assessee, which is requisite for claiming depreciation as per provisions of section 32 of the Act. Ld CIT DR pointed out that the assessee could not furnish corroborative evidence in support of its claim that the assessee is owned wholly or partially by it and it was put to use for the purposes of its own business. Ld CIT DR submitted that the AO has orally asked queries regarding claim of depreciation by the assessee, which was replied by the assessee vide reply dated 26.12.2016 in a short manner without any supporting documents. Therefore, it s clear case of insufficient and inadequate enquiry, which also falls in the ambit of no enquiry, therefore, ld. Pr. CIT was right in exercising revisionary powers u/s.263 of the Act available to him. 11. Placing rejoinder to above, ld A.R. submitted that the AO has made enquiry during assessment proceedings, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter in the present assessment year under consideration i.e. 2014-15. Therefore, we are of the considered opinion that the AO has merely conducted a formal enquiry without any verification and examination of the issue of allowability of depreciation of Intangible Asset USA Asset and to examine the veracity and sustainability of the claim of the assessee on Intangible Asset acquired by it, therefore, reorganization or merger of a wholly owned subsidiary company situated at USA. In our considered opinion, it is a clear case of insufficient and inadequate enquiry and thus, it is a clear case of no enquiry by the AO on an issue. 15. Ld A.R. has relied on various case laws to allege that the AO has considered the issue and direction of Ld Pr. CIT to examine the issue is a change of opinion. For this proposition, ld A.R. has relied on the following judgments: i) Spectra Shares Scrips Pvt ltd (2013) 36 taxmann.com 348 (AP) ii) Development Credit Bank Ltd(2011) 196 Taxman 329 (Bom) iii) Visu International Limited in ITA No.394/Hyd/2016(ITAT Hyderabad) 16. On carefully, vigilant and respectful perusal of above judgments, we are of the considered view that the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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